About Currency Cross-Eyed

Trading currency crosses opens a whole new side of the currency markets, as different crosses possess different qualities that can suit any style of trading. Some crosses move fast and are extremely volatile with daily ranges that may exceed over 100 pips. While other crosses move relatively slow and exhibit low volatility, which is more suited for novice traders.

Cross-Eyeing: EURJPY Pullback – Trade Closed

Well, things were looking good for me for awhile.. I was up a good 100+ pips, at which point I had moved my stop to break even. But then we saw more range like trading and eventually, I got stopped out!

Yesterday we saw some pretty choppy movements, and in the end, it was the euro that lost out. But that was later in the day. I happened to stop out earlier in the day, when the yen gained across the board. As far as I can tell though, it seems like the pair is consolidating and forming a symmetrical triangle now!

I think with all the news coming out today, it’s alright that I’m out of this position. With all the choppiness, I think it was the right decision to move my stop to break even right away. Besides, I probably would have closed earlier, ahead of all the high impact reports coming out later today.

Trade Closed at 113.00 – 0 pips / 0.0%

So that’s it for me this week. I’m gonna wait and see what happens after the ECB rate decision, as well as tomorrow’s NFP report. I’ll probably have a ton of reading to do over the weekend to try and decipher what’s going on in the markets right now.

On another note, I can’t believe Shaq signed with the Celtics! THE BIG LEPRECHAUN! Hah! This should be interesting!

Trade Update: 2010-08-02 23:05

Risk appetite came in strongly yesterday, on the strength of good earnings data on both sides of the Atlantic, as well as the promising results from the Euro zone PMI and US ISM PMI reports. This helped boost the euro, which just posted new highs versus the dollar.

Hopefully this strength carries across the board, helping out my trade along the way. I’ve moved my stop to break even to avoid getting chopped up. Let’s see where this sucker goes!

Trade Update: 2010-08-01 22:40

Aaaaand I’m in! Because of that yen rally last Friday, EURJPY dipped all the way to the 50% Fibonacci retracement level and triggered my trade in the process. It looks like that broken resistance turned support level did hold and the price bounced off that area. I’m crossing my fingers that EURJPY continues to climb since Pip Diddy just told me that a lot of events are lined up for the euro zone this week.

Trade Idea: 2010-07-28 23:42

Aha! I spotted a potential long trade for EURJPY using the good ole Fibonacci tool and a former resistance level.

I’m going to keep my eye on unemployment data, as German unemployment and US jobless claims will be coming out today. Both accounts are expected to come in slightly better than last month’s releases. This could boost risk sentiment, which of course would benefit the euro.

Tomorrow though, we’ve got German retail sales, euro zone CPI data and US GDP data. While retail sales are expected to have seen no growth last June, analysts are projecting that consumer prices rose by 1.8% year on year, up from the 1.4% printed last month. This could lead to speculation that the ECB may just raise interest rates, which could boost the euro.

In any case, these reports could all provide to be catalysts for major moves, so I’m going to have to put a relatively wide stop on this trade.

Aside from that, I see that traders are quite risk hungry right now. Heck, even those stress tests didn’t cause them euro bulls to sweat last week – in fact, the euro’s been tempting to post new highs across the board! Unless there’s a drastic shift in risk sentiment, I expect the euro to keep chugging along and that buyers will keep finding opportunities to buy at cheaper prices.

On the technical side, we can see that the pair’s fall seems to be slowing down. With the 38.2% Fibonacci retracement level and a major resistance area broken, I think we might see some offers for EURJPY soon.

To ride the overall uptrend, I will be putting a buy order at 113.00, which is the this week’s open price and the 38.2% Fibonacci retracement level. I’ve set my stop roughly equal to the pair’s daily average range of 157 pips. I will ultimately aim for 116.00, but I will take some profits recent highs.

Here’s my game plan:

Long EURJPY 113.00, stop loss at 111.50, pt1 at 114.50, pt2 at 116.00. Of course, I’ll be risking 1% of my account on this swing trade.

6 comments

Since this is is a swing trade that will go on for a couple of days, I need to put a wide stop. I put a 150 pip stop (equal to the pair’s average daily pip-movement) on this one, which puts it below the 61.8% Fib too!

Since this is is a swing trade that will go on for a couple of days, I need to put a wide stop. I put a 150 pip stop (equal to the pair’s average daily pip-movement) on this one, which puts it below the 61.8% Fib too!